For this module’s portion of your final project, do a brief study on the market demand for your product (energy/pollution control device). If the product does not already exist in that country (India), you can use a similar product to look up demand figures. There are many industry specific sites on the internet you can use to learn about current consumption around the world. Describe who your target market is for this product.
Next, determine how you will price your product by developing a pricing strategy. In this module you have learned about the various pricing structures of competition-based pricing, cost-plus pricing, skimming, limit pricing, market-oriented pricing, penetration pricing and premium pricing. For this portion of your final project, you will need to pick a price and pricing strategy and explain why this is the correct strategy for this market based on your research.
The resource section for this module contains two websites that will teach you about pricing strategies and how business strategy helps determine which pricing strategy to use.
Economies of scale
Based on your research do you think the pricing strategy and price is correct? Are there additional factors that should be considered? If so, please include these factors in your analysis.
Finally, discuss the supply chain management structure for your product by addressing the following questions:
How will you get your product to the final consumer? How will you build your transportation structure?
How will you handle insurance and payments?
Will you need intermediaries to handle some parts of the supply chain or will you keep it in-house?
Make sure to address these issues clearly and concisely.
Demand of the Pollution Control Device
Concern over environmental degradation is on the rise internationally. This is why there are various business opportunities in sectors dealing with water and wastewater treatment, waste management, and air pollution control device. The high levels of urban air pollution from Thailand to Chile promise the constant availability of an active market for the air pollution control device. The air pollution control device market can be categorized into various segments including; scrubbing systems, filtration systems, electrostatic precipitators, and many others. The demand for the product is expected to rise especially since there is tighter implementation of stringent ecological regulations, as well as the growing public awareness on pollution (Bandyopadhyay, 2014). An improvement in the infrastructure sector is also contributing to an increased demand.
The Target Market
The target market for this product includes the manufacturing companies, which often have to deal with harmful byproducts. This is because manufacturing companies are the major source of air pollution in the environment. Considering the fact that policies have been put in place, which may lead to loss of operating licenses for many companies, they have no choice but to consider the use of these pollution control devices (Singh & Rao, 2015). There are many such companies in India, which is why it is the chosen target market.
Pricing the Product
Considering the fact that many other companies have already engaged themselves in selling this product to consumers, it means that there is already stiff competition. However, it is clear that most companies would rather spend less, as it is a product that does not bring in any profits whatsoever; they are purchasing them due to the measures put in place to control pollution. Therefore, the pricing strategy used will be the penetration pricing. The price will be set artificially lower than what other companies offer. This will see to it that the product from this specific company gains market share since many people will be interested due to the low price (Dovleac, 2014). However, after the company has gained sufficient market share to sustain it, the price is increased gradually.
Supply Chain Management Structure
Getting the product to the final consumer is very challenging. This is because they are bulky and transportation may take a very long time. Therefore, the company will rely on suppliers who will purchase them in high numbers, before making them available to the final consumer (Madhani, 2015). My transportation structure will involve both air and road. Air transportation will be used to ensure that the products get to the required region on time, and without much damage. After that, they will be transported by road to the selected suppliers.
To make it easier to handle insurance and payments, the company will rely on the suppliers, since it will be complicated for the main company to deal with the customers directly (Madhani, 2015). The company, therefore, will collect payments from the suppliers, as well as offer insurance for the products so that they can offer them to consumers. Therefore, in case of any complaints, the consumer will simply approach the supplier from which the purchase was made. The complaint will then be forwarded to the main company and a response will be received.
Bandyopadhyay, A. (2014). Air Pollution Control in Fuel Coke Manufacturing in India: Assessment of Current Practices and Policy with Recommendations for Improving Air Emission Management. Environmental Quality Management, 23(4), 39-47. doi:10.1002/tqem.21375
Dovleac, L. (2014). Pricing Policy And Strategies For Consumer High-Tech Products. Bulletin Of The Transilvania University Of Brasov. Series V: Economic Sciences, 7(1), 37-42.
Madhani, P. M. (2015). Demand Chain Management: Enhancing Customer Lifetime Value Through Integration of Marketing and Supply Chain Management. IUP Journal Of Business Strategy, 12(3), 7-26.
Singh, U., & Rao, A. (2015). Integrating SO and NO control systems in Indian coal-fired power plants. Decision (0304-0941), 42(2), 191-209. doi:10.1007/s40622-015-0083-3